Some things have happened. I remember some warehouses were cleared out by auction, for example. There has been room for becoming more efficient but some of that requires spending money on IT infrastructure for example and takes time before the ROI becomes not worthy. In other cases there just won't ever be efficiency because the legislature or the unions won't stand for it. And, finally, there's all that mandated funding.
Everyone remember Al Gore's "reinventing gov't" and just how much did he save? Oh wait, all those cuts came in defense not the bloated bureaucracy.